The government updated its guidance page for landlords yesterday with additional detail on the 1 May transition. It now explicitly confirms that existing fixed term ASTs will run to their contractual end date before converting to periodic tenancies, and sets out the notice periods for the new grounds. Worth reading alongside the information sheet published on 20 March.
https://www.gov.uk/government/publications/renters-rights-act-guidance-for-landlords
What it still doesnt address is break clauses. Plenty of fixed terms have a six month break clause and theres nothing in the guidance about whether those survive or become unenforceable on 1 May. The Act itself is silent on it. Thats the question most landlords should actually be asking.
@rb471956 the break clause point is exactly what I have been trying to get clarity on. Both my ASTs have a tenant break clause at six months, which in practice means either tenant could trigger it in late June. If the tenancy has by then converted to periodic under the new Act, does the break clause just fall away as irrelevant, or does it somehow survive as a right the tenant can still exercise? And if it does fall away, does that effectively mean the tenant is locked into the periodic tenancy with no way out other than the new notice periods? I rang the NLA helpline yesterday and got a very vague answer about waiting for further guidance. Not hugely reassuring with four weeks to go.
Once it converts to periodic the break clause is moot. A periodic tenant can end the tenancy by giving notice under the new Act anyway, so theres no need for a break clause to survive. The practical effect is the same, the tenant can leave. The difference is the notice period which under the new Act is two months rather than whatever the break clause specified. So if anything it buys you slightly more time than a one month break would have.
All well and good for those of you south of the border but the gov.uk guidance doesn’t even acknowledge that some of us have properties in both jurisdictions.. I’ve got two in Newcastle covered by the RRA and one in Fife which obviously isn’t, but try explaining that to a tenant who reads the headlines and thinks Section 21 abolition applies everywhere.
I raised this with my letting agent in Dunfermline last week and she hadn’t even heard of the RRA transitional guidance. Just looked at me blankly.. Scotland has its own regime obviously (Private Residential Tenancy since 2017) but the lack of any coordinated messaging is genuinely causing confusion.
Has anyone found a decent plain English comparison of the two systems?? I might put something together myself if not.. tenant facing, nothing too legalistic.
Cheers!
The jurisdictional issue @theartfulfreeholder raises is fair enough but even for those of us entirely in England the guidance is still inadequate on break clauses. I have been going back and forth on this for weeks now and the updated guidance from 1 April says nothing new on the subject. My two tenancies both have a six month tenant break clause and it matters whether that clause survives conversion to periodic or simply falls away, because it affects when and how I can plan. With less than four weeks until the Act comes in I find it remarkable that this still has not been clarified. I spoke to my letting agent on Thursday and she said they had asked the NRLA for a definitive position and were told it was still being discussed with DLUHC. That is not especially reassuring.
I’ve now emailed my solicitor directly on the break clause question as the guidance still says nothing useful. His initial response, received Friday evening, was that he needs to check with counsel. Which rather proves the point that nobody actually knows. The Act comes into force in under four weeks and practising solicitors are still guessing at the mechanics. I accept that fixed terms converting to periodic is settled, but the break clause gap is a genuine problem for landlords who drafted ASTs in good faith with mutual break provisions. If my tenant exercises a break at six months under the existing contract, does that trigger an immediate periodic tenancy under the new regime, or does the fixed term simply end? Nobody seems willing to commit to an answer.
For what it’s worth @GrumpyLandlord47 my solicitor up in Newcastle came back with a different take.. she reckons that if a tenant exercises a contractual break before 1 May, the tenancy ends under the old rules. But if the break date falls after 1 May, the fixed term survives to that break date and then converts to periodic under the new Act. So no gap, no ambiguity in her view.
Whether that’s right or not I have no idea!! But it’s at least a coherent reading. The problem as always is that none of this is tested yet and the guidance is silent on it.
I’ve asked her to put it in writing so I at least have something to point to if it ever comes up with either tenant. Twenty five years of doing this and I’ve never felt less certain about the basics.. Cheers!
Update on the break clause question. My solicitor came back properly on Monday after consulting with a colleague who specialises in housing. His view is that contractual break clauses in existing ASTs will effectively become redundant once the tenancy converts to periodic on 1 May, because the tenant will simply have the statutory right to give notice under the new Act anyway. So the break clause does not need to “survive” because the new notice provisions replace it in practical terms. He did caveat that there is no case law yet and the guidance is silent on the point. For the tenant it makes no real difference since they get a better deal under the Act. For the landlord, the loss is that any mutual break clause giving the landlord an earlier exit than the statutory grounds is gone. Whether that is legally correct remains to be seen but it is at least a coherent position, which is more than the gov.uk guidance has managed.